This is the next article in my series on why 2017 will end with fewer law firms than there are today and why the number of firms will continue to decline as time goes on. My last post looked at why law firms are failing in today’s economy. The reason is due to two laws which will never change. The first is the law of supply. The second is the law of demand. To put it simply the number of attorneys has been going up for years while the amount of work for them to do has been going down. That leaves attorneys looking like this poor chap:
The big thing to understand is that the points I made in my last article relate to why law firms and lawyers are already struggling. The sad fact of the matter is things are going to get much, much, much, much (much) worse in 2017 and in the years to come. This is due to cultural changes as well as some specific technologies. I’ll be using this article to lay out how cultural changes will be greatly reducing the need for attorneys and my next post will dive into specific technologies which will eliminate law jobs. Let’s take a look at what changing drug policies, declining marriage rates, and the “sharing economy” will do to lawyers in the coming year as well as in the future.
Marijuana legalization is greatly reducing the demand for legal services
Marijuana is on a rapid path to national legalization and its current trajectory is already having a big impact on law firms and the demand for legal services. In 2011 there was one marijuana arrest in the US every 42 seconds1. By 2015, after legalization in Colorado, Washington, Oregon, and Alaska, that number dropped to one arrest every minute2. Cannabis arrests during that time frame decreased by roughly 175,000. That means there were 175,000 fewer cases to be worked on by a prosecutor and a defense attorney. In 2016 California, Nevada, Massachusetts, and Maine legalized the drug. This means that the number of states with legal marijuana has doubled and this trend can be expected to continue. This will take an increasing number of cases out of the legal system as time goes on. This will reduce demand for those in criminal practice, on both sides. Many of those attorneys will attempt to make up for this reduced demand by practicing in other areas which, in turn, will increase the supply of attorneys in those given areas.
Right now you may be thinking “they won’t legalize marijuana in my state anytime soon so I don’t need to worry.” Wrong! Consider the following hypothetical. Attorney “A” practices criminal and family law in Nevada, but is also licensed in Florida. Attorney “B” lives in Florida and practices family law. “A” recognizes that Nevada’s marijuana legalization will make things tougher for all Nevada attorneys. As a result, he relocates his practice to Florida and begins practicing criminal and family law in the sunshine state. Attorney “B” just received additional competition, in Florida, due to Nevada’s changing marijuana laws. This is simple supply and demand and as more states legalize marijuana the greater this effect will be.
Declining marriage rates are leading to less work for attorneys
I explained in my last article that the marriage rate in the US have been declining for years. Fewer marriages means fewer divorces. Consider that the number of divorces or annulments in the US dropped by roughly 141,000 between 2000 and 20153. This is in spite of the fact that the US population grew substantially during that time. This has greatly reduced work for family law attorneys. The big thing going forward is that the “millennial” generation has kicked the trend of delaying marriage (or not getting married at all) into overdrive. 2014 statistics showed that millennials were on track for the lowest marriage rate of any generation4. This is occurring at a time when we still have more attorneys than ever before and more law schools than ever before. In other words, things are going to get increasingly hard for family law attorneys.
The “sharing economy” is also reducing work performed by those in the legal profession
Don’t know what the sharing economy is? Just think of Uber, Lyft, Airbnb, etc. These types of services (which I use regularly and find awesome) make society more efficient which, in turn, reduces the amount of work available to the legal profession. Let’s look at a specific example of how these services hurt lawyers. Uber’s “Pool” service is just beginning to roll out in many places. This is where two separate people share an Uber ride and split the fare. The result of Uber Pool? During Pool’s first eight months in Los Angeles the service resulted in 7.9 million fewer miles being driven in the L.A. area. Just think of how many car accidents that takes out of the system. For a good explanation of how Uber Pool works watch the following video (featuring the CEO of Uber) from the five minute mark to roughly the 8:45 mark:
This is just one aspect of the sharing economy and the impact it will have on the personal injury field is obvious. We haven’t even gotten to the fact that cities with Uber see substantial drops in DUI cases. Just as an example (there are many such examples), Uber came to Peoria, Illinois at the end of 2015. The result? DUI arrests dropped by 7.3 percent in 2016 and the issuance of traffic tickets dropped by 25 percent5. When you consider that these types of services are still just making their way to many areas, and that many people are still just beginning to use these services, it becomes obvious that the shared economy is going to greatly reduce the demand for personal injury attorneys, DUI lawyers, and others in the legal profession.
Changing cultural norms will force many law firms to close in 2017 and beyond
It’s quite simple really. The number of states with legalized marijuana just doubled and that number is only going to increase as time goes on. Fewer people are getting divorced (as a result of fewer people getting married) and that trend is accelerating. Finally, the sharing economy is leading to a reduction in demand for legal services (by reducing car accidents and DUI cases) and the number of people using shared services is growing dramatically (which will speed up the demand in reduction for legal services). So…..you think things are tough for attorneys now? They’ll be getting a whole lot worse. Of course many lawyers will ignore these trends and keep chasing after a share of declining markets. Well…..here’s a picture of what those lawyers look like:
If you want to ensure the future of your practice then you need to recognize and adapt to the types of trends discussed above. My next article will be discussing technology trends which are quickly wiping out legal jobs in areas including litigation and employment law.
1Huffington Post: One Marijuana Arrest Occurs Every 42 Seconds In U.S.: FBI Report accessed at: http://www.huffingtonpost.com/2012/10/29/one-marijuana-arrest-occu_n_2041236.html
2Marijuana arrests fall to lowest level since 1996: accessed at: https://www.washingtonpost.com/news/wonk/wp/2016/09/26/marijuana-arrests-fall-to-lowest-level-since-1996/?utm_term=.79eaa1c29ca6
3Centers For Disease Controls and Prevention: Provisional number of marriages and marriage rate: United States, 2000-2015: accessed at: https://www.cdc.gov/nchs/data/dvs/national_marriage_divorce_rates_00-15.pdf
4Millennials say no to marriage: accessed at: http://money.cnn.com/2014/07/20/news/economy/millennials-marriage/index.html
5Peoria, Illinois Crime Summary: accessed at: http://www.peoriagov.org/content/uploads/2012/11/UCRreport_EOY2016_1485892704_add.pdf